The demand for security systems and devices is continually growing in Colombia due to security concerns of government, industry and households. Security systems and devices form an integral part of government, business and consumer budgets. The Colombian government has also been focusing policies and providing resources to address security risks in the country, and thereby provide for a safer environment for people and industry. The dramatic improvement in Colombia’s security posture since 2002 has had a positive impact on the country’s business climate and been a major factor in attracting more investment, tourism and commercial transactions to Colombia.
The market is very diverse and includes: alarm systems, access control devices, information security systems, automatic vehicle location systems, ionization detection devices, armoring, personal protection clothing, surveillance and counter-surveillance equipment, and polygraph equipment. From 1994 (the year in which the government created the Superintendent’s Office for the Security Industry) until the present, growth in this sector has been approximately 360 percent, with an average annual growth rate of 15 percent. Currently there are 3,510 companies operating in the sector, according to the Superintendent’s Office of Security. However, the vast majority of these companies are security guard companies whose equipment encompasses uniforms, firearms and communications devices.
There are two important players in the market: the security equipment distributor and the systems integrators. The security equipment distributors are those companies which import and market the security devices to the final user. The systems integrators are those companies responsible for providing the overall solution which includes the installation, operation and maintenance of the security system equipment.
It is important to note that during the last ten years, security departments within companies have increased by 39 percent and vehicle armoring has increased by 446 percent. The number of armored vehicles has increased from 2,255 in 1997 to 12,321 in 2007 (latest publicly available data). Correspondingly, registrations of security companies published by the Superintendent’s Office have increased 285 percent rising from 120 in 1997 to 462 in 2007. However, many of these companies may no longer be active.
Colombia’s security equipment market size is extremely difficult to calculate. There is little local production; most equipment is imported. The equipment varies widely in terms of technology and with CCTV cameras and biometric devices at the higher end. The best way to estimate the market size is to quantify the import value through the Harmonized System Code HS code (CIIU in Spanish). The devices in highest demand are: Television cameras CCTV, voice transmission and reception devices, data transmission and reception devices, video and data equipment device, fire equipment detection, biometric equipment, alarm systems, access control devices, information security systems, automatic vehicle location systems, ionization detection devices, personal protection garments, surveillance and countersurveillance equipment and polygraph equipment.
According to unofficial estimates among companies that import and distribute the type of equipment mentioned above and DIAN data, the security equipment market size is believed to have fluctuated between US$700 million and US$ 800 million in 2008. According to the chart above, Closed Circuit television cameras (CCTV) is the equipment in highest demand in the market (approximately 37 percent of the market) followed by x ray equipment, TV monitors, metal detectors, communication blocking devices, surveillance devices, fire detection, among others (at approximately 25 percent of the market).
Buyers prefer well known brands. Recently a large number of local small and medium-sized companies (SMEs) have entered the market as systems integrators offering end-to-end solutions that include: creating the solution, and buying and installing the devices and the material from big security equipment distributors.
They also offer periodic maintenance programs. There is also a high demand for security services in Colombia. This subsector of the security and safety market has grown 360 percent since 1994 and has become an important employer in Colombia as a result of the ever-changing security situation. As seen in the graph below, in 2007, security departments within companies represented 37 percent (around 1,298 units) of the total security services market, followed by consultancy firms with 27 percent (950 companies), armed security services with 15 percent (529 companies).
Sixteen percent of the market is represented by companies offering security equipment leasing services, training, special services and advisory services. Although armoring companies only represent two percent of the total market, this subsector has grown substantially in recent years becoming a potentially attractive market for U.S. exporters. Local companies (mostly SMEs) have taken advantage of the huge demand for armored vehicles that the country demanded in the past years due to the violence experienced in the 1980s and 1990s.
By Juan Antía